EUROPE! Hands Off Our Medicine

Millions of people in developing countries rely on affordable generic medicines produced in countries like India to stay alive. But the European Commission is pushing aggressive policies that will severely restrict people’s access to these life-saving medicines. The attack is taking a number of different forms – free trade agreements, international treaties, customs regulations. If Europe succeeds, millions of people across the developing world could see their source of affordable medicines dry up, as generic companies will no longer have the space to produce or sell them.

“Europe! Hands Off Our Medicine” is Médecins Sans Frontières’ campaign to push Europe to back down.

“We depend on access to affordable generic medicines like those produced in India to treat all kinds of diseases. We buy 80% of our AIDS medicines from India – medicines that keep 160,000 people alive today,” said Dr. Unni Karunakara, President of MSF’s International Council. “On their behalf, we cannot remain silent as Europe works to close the door on every aspect of drug supply – the production of a generic medicine, its registration, and its transportation to patients in other parts of the world. So today we are launching a campaign demanding ‘Europe! HANDS OFF our medicine.”

“What the Europeans are doing is effectively snatching the medicines out of our hands,” said Dr. Marius Müller, MSF’s Medical Coordinator in Kenya. “Because generic medicines are more affordable, we have been able to put more and more patients on AIDS medicines. This has meant a lot of hope for our patients who can work again, who can bring up their children again. But if Europe has its way and shuts off this source, we risk killing the success of what has been achieved here in the last five years.”

I – BACKGROUND: Patents, generics, and access to medicines

India: The ‘pharmacy of the developing world’

When a drug company holds a patent on a medicine, it can prevent other companies from producing or selling the drug in a country for the duration of the patent’s term, usually 20 years. This allows the company to charge high prices in countries where it holds patents, because there are no competitors in the market, and drugs remain unaffordable for longer. Competition among multiple producers is the tried and tested way to bring the price of medicines down – it’s what helped pushed the cost of AIDS treatment down by more than 99% from US$10,000 per patient per year in 2000 to under $70 per patient per year today.[1]

Until recently, India did not grant patents on medicines, so local companies could forge ahead and produce identical quality drugs to the original product, but at heavily reduced prices. As a result, these generic drugs manufactured in India are among the most affordable in the world. By producing and exporting cheaper generic versions of drugs that were patented in other countries, India became a key source of affordable essential medicines, such as antiretroviral medicines to treat HIV/AIDS. India is in effect the ‘pharmacy of the developing world.’

More than 80% of the medicines MSF uses to treat its more than 160,000 patients on AIDS treatment come from generic producers in India. A study[2] published in September 2010 in the Journal of theInternational AIDS Society reviewed 17,000 donor-funded purchases of AIDS medicines made by 115 low- and middle-income countries between 2003 and 2008, and found that more than 80% of these came from India. The proportion of AIDS medicines produced by Indian manufacturers is even higher – up to 90% – with certain important medical needs such as paediatric medicines to treat HIV in children.

Accessing affordable medicines from India is a lifeline for all developing countries – but this situation is now under attack, and the European Commission is playing a leading role in these attacks.

The treatment time bomb

As a World Trade Organization member, India has to comply with the trade rules set by the WTO. These rules include minimal levels of intellectual property (IP) protection such as patents and trademarks. The central agreement is the Agreement on Trade-related Aspects of Intellectual Property, or TRIPS, which obliges WTO countries to grant patents on technological products, including pharmaceuticals. To comply with TRIPS, India changed its patent law in 2005 and started to grant patents on medicines. As a result, if patents are granted in the country, Indian generic manufacturers will not be able to produce cheaper generic versions of these medicines, which will have an impact not only in India, but also on other countries that rely on importing generic medicines from India in order to treat their populations.

HIV/AIDS is a life-long disease and people require access to newer medicine combinations when side effects or drug resistance develops over time. Some of the newer AIDS medicines such as raltegravir and etravirine have already been patented in India, blocking the generic competition that led to the deep price drops with the first generation of AIDS drugs. With growing numbers of people in urgent need of treatment, this is effectively a treatment time bomb waiting to explode.

Access to medicines will therefore increasingly depend on the use of what are known as ‘TRIPS flexibilities’ – legal measures enshrined in countries’ laws to promote access to more affordable medicines. For example, when India’s Parliament was designing its patent law, it ensured that a certain amount of safeguards were included to limit abusive patenting practices by pharmaceutical companies. Another TRIPS flexibility is allows governments to overcome patents when they stand in the way of access to medicines is the issue of a compulsory licence which authorises a third party to produce, import or export a drug, despite the patent. Thailand for example issued a compulsory licence on a patented AIDS medicine in 2006, as the original product was too expensive, opening the way for domestic production of the drug.But the effectiveness of these types of flexibilities is now threatened by the EC.

2 – The European Commission’s multiple attacks on access to medicines

The attacks of the EC on access to medicines are taking multiple forms – customs regulations that block trade in generic drugs, bilateral free trade agreements, and the international anti-counterfeiting trade agreement or ACTA.

In pursuing these trade policies, the EC is acting in violation of its previous commitments. In 2001, all WTO countries – including European Union member states – signed the Doha Declaration, which states “that the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO Members’ right to protect public health and, in particular, to promote access to medicines for all.” This Declaration allows countries to take measures to protect public health. The EC repeatedly says it’s acting in accordance with the Doha Declaration – but at the same time pursues aggressive policies that threaten to shut down access to affordable medicines across the world.

Customs regulations and the detention of generic medicines

European governments have hindered the flow of legitimate generic medicines by detaining shipments of drugs destined for patients in developing countries as these medicines were transiting through the EU. The EU took these steps on the basis of EC customs regulations that concern violations of patents or trademarks.

Cynically, the EC has tried to justify these detentions on the grounds of public safety, stating that these rules are needed to combat fake medicines. While fake medicines are indeed a public health threat, these rules have in fact been used to hamper the transit, storage and export of legitimate generic medicines for people living in developing countries. These detentions can lead to significant delays in the delivery of medicines, or even stock outs, for patients who in many cases rely on these drugs to stay alive.

Free trade agreements

Through bilateral trade agreements, the EC is seeking to get countries to agree to higher standards of intellectual property (IP) protection and enforcement than even the TRIPS agreement requires. EC trade negotiators remain staunchly in favour of expanding the IP system and the rights and benefits of IP holders at the expense of access to medicines for millions of people in developing countries.

In addition, these trade policies undermine the EU and member states’ own efforts to increase access to medicines to people living in developing countries, as they purchase key medicines for people living with HIV/AIDS from India via bilateral or multilateral financing mechanisms.

The EC is currently negotiating such free trade agreements (FTAs) with several developing countries, including India, Brazil, Thailand and the Philippines. Of these, the most concerning is the one being negotiated with India, given the developing world’s dependence on the country’s generic manufacturing capacity. Negotiations for a bilateral trade agreement between the European Commission and India are now entering their final round and are set to conclude in late 2010. The FTA is expected to be completed in time for the India-EU Summit in December 2010.

Earlier this year, MSF raised concerns with EC Trade Commissioner Karel De Gucht and urged the EC not to push for measures in the EU-India FTA that will affect access to affordable medicines in developing countries. The EC responded by stating that certain provisions – such as patent term extensions which prolong the life of a patent and keep drugs unaffordable for longer – will not be included in the FTA. Later versions of the text seem to confirm this point. The EC also stressed that while they will continue to pursue other provisions, these will not hinder access to affordable generics. But contrary to the EC’s claims, these measures will have a significant negative impact on access to medicines. MSF cannot afford to stay silent as the EC seeks to close off access to affordable medicines in the developing world.

The secret treaty – ACTA

Rich countries, including those in the EU, have been using a secret treaty to aggressively champion heightened intellectual property enforcement measures that will have a detrimental impact on access to medicines. The anti-counterfeiting trade agreement (ACTA) negotiations are reportedly nearing finalisation after more than two years. [3] Early non-official indications are that the EC has not succeeded in imposing many of its problematic clauses it was pursuing, but the vast majority of these provisions are the same ones the EC is seeking to get India to agree to in the FTA. In other words, the EC is now effectively trying to push terms on a developing country that may have been deemed too intrusive or onerous for rich countries negotiating ACTA.

Most developing countries are not part of this negotiation, but the EC and others have made it clear that they intend to put pressure on these countries to sign up to this non-negotiated agreement once it is completed. The danger of ACTA becoming the new global standards is therefore very real.

The potential consequences for access to medicines are considerable – the positions taken by the EC could ultimately limit considerably the manufacture, distribution and availability of affordable generic medicines across the developing world.

While there have been attempts to justify ACTA as a way to deal with the hazard of fake medicines, ACTA has nothing to do with improving the quality of medicines used in developing countries at all. Its purpose is to protect private commercial interests, such as those of pharmaceutical companies. In fact, because ACTA jeopardizes access to low-cost, quality generic medicines, it may lead to a shortage of affordable medicines, which itself usually leads to increased illegal trade in spurious and fake medicines.

This treaty aims to create a global enforcement regime for intellectual property rights. This is in direct challenge to the fact that patent and trademark rights are not global and differ from country to country. Developing countries have the right to design their intellectual property laws in a way that takes their public health needs into account – India’s patent law, for example, restricts abusive patenting in an effort to balance the need to protect intellectual property with the need to protect public health. But ACTA would heighten intellectual property standards across the board.

The European Commission has been aggressively pushing the agenda at these negotiations, targeting intellectual property in the area of pharmaceuticals. It takes the worst of the EC rules, such as the customs regulations and those it seeks to impose in India via the FTA, and attempts to transform this into a global agreement.

ACTA does not include protections for patients, or safeguards to prevent abuse. ACTA would limit competition, thus increasing the cost of medicines, because of its deterrents for generic manufacturing and export. But very little in ACTA recognizes the need to protect the public.

3 – How the EC’s actions are harming access to medicines

1. By preventing the flow of generic medicines from producer to patient: the detentions

Since 2008, there have been multiple incidents of legitimate generic medicines being detained on the basis of EC customs regulations:

Dutch customs authorities detained a shipment of an active pharmaceutical ingredient (losartan potassium) necessary to make a generic medicine to treat high blood pressure. The medicine was transiting from its producers in India to Brazil via the Netherlands in December 2008. The drug is neither patented in India nor Brazil, but the customs raids were carried out nonetheless, on the basis that the drugs were under patent in the country of transit – the

Notes:

See Médecins Sans Frontières’ analysis of access to AIDS medicines, Untangling the Web of ARV prices, available at: http://utw.msfaccess.org/background/aids_progress_under_siege

http://www.jiasociety.org/content/13/1/35

Official negotiations for ACTA began in June 2008. Key negotiating parties are from developed countries and currently include Japan, the US, the EC, Switzerland, Canada, Australia, Mexico, Morocco, New Zealand, South Korea, and Singapore.